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Nov, 07 2014

First Choice for all

400+ outlets, 220 cities and rapidly expanding. With a vision to build a pre-owned car ecosystem in the country, Mahindra First Choice Wheels Limited (MFCWL) is on a fast track to aggressively expand and establish 1,500 franchise outlets in the next five

While expanding its physical network, MFCWL is also launching a series of technology enabled products that will empower the dealers and consumers.

AS Modi-led Government comes into power, experts believe that India's economy is projected to be back on a 6+per cent annual GDP growth track.With the new car market showing 'green shoots' of growth, the used car market is expected to be buoyant in the next few years  and provide the consumer with more brand choices of vehicles than they have had in the past. Consumer acceptance of pre-owned cars is rapidly improving and the appetite for an 'organised' experience is higher now than ever before. Certification and warranty are critical enablers of this “organised” transaction. These products coupled with a showroom experience ensure that the customer has a new-new car buying experience with the pre-owned purchase.

In India, it is estimated that used car sales outstrip the sales of new cars by a factor of 1.2:1. The used car market is projected to grow at a 16 per cent Compound Annual Growth Rate (CAGR) to a level of close to eight million units by FY19. At this size, it would be 1.8 times the new car market which would still be lower than the used car to new car ratio in other developed geographies like the US and Europe where the used car to new car sales ratio is over 3:1. The used car market is therefore poised to be growing at a rapid pace for many years to come.

Associate with the pioneers

MFCWL began its journey in used car retailing way back in 2000 as purely an online player. The brand quickly transitioned to a physical model by setting up company-owned and operated outlets in key cities and thereafter started its franchise operations in 2008. The brand offers its franchisees a fixed fee royalty model in which the norms vary from the class of town (category). The franchisee is supposed to follow the brand's processes and systems. MFCWL today has 72 towns with multiple outlets and 46 franchisees have multiple outlets in various cities and this number is growing fast  a true testament to the business model from the point of view of a franchisee, The company always gives first preference to its existing franchisees to go for another outlet.

Within a short span of just five years, MFCWL has 400 franchises. The company plans to expand this number to 500 outlets over the year. Consumers will be able to choose from a range of certified used cars in nearly every city in India, not just in metros but also extending deeper into tier II and III cities.

Making a mark in pre-own car sales

MFCWL vision is to build a used car ecosystem for India by bridging wholesale and retail channels while leveraging physical and online infrastructure. MFCWL closed FY 13-14 with 351 franchise outlets and nearly 60,000 cars sold  a 30 per cent growth over the prior year. Besides that, the company added 99 dealers in FY14, taking the company's presence to 220 cities, which is a validation of its successful business model.

Partner for a safe business drive

With the extensive physical network and cutting edge technology enabled products, MFCWL is the only true hybrid (online & offline) pre-owned business in the country. MFCWL strongly believes that the used car business will always be a ‘contact sport’ implying the need for physical footprint accompanied by online marketing. Elaborating on expansion via franchising, Yatin Chadha, Senior Vice-President  Retail Business, Mahindra First Choice Wheels Pvt Ltd, says: “On the basis of our dealership route, our franchise model has been developed. Over the years, the number of outlets added through the franchise route has increased and in the last financial year we operationalised close to 100 outlets through the franchise route which implies about two outlets per week.”

Commenting on brand's growth via dealer network, Nagendra Palle, CEO, Mahindra First Choice Wheels, informs: “The automotive retail business worldwide is driven through dealers. The dealer brings in a strong entrepreneurial capability to drive business at the local level. Considering the complexity of the used car business at Mahindra First Choice, we started with investment through the company-owned outlets route. Over the years, we understood the needs of the used car buyer and clearly articulated the areas where Mahindra First Choice as a company could add value to the dealer. This includes areas like developing products, procurement channel, training and marketing support. We also identified the areas where the dealer could play a major role. This includes areas like creating the infrastructure and running the operations on a day-to-day basis.”

Beyond providing certification and warranty products, the company has also invested in developing a best-in-class OMS (Outlet Management System). OMS is installed at every outlet and allows the dealer to manage customer leads and inventory online. In addition, the company has developed tools to help the dealership merchandise its inventory across online sites. On the back of transaction data from the franchise network and its online auction business, MFCWL has launched India's first and only transaction based analytically driven used car pricing guide.


MFCWL ensures that each used car meets a high level of quality. Before purchasing the car, a trained engineer thoroughly inspects the vehicle and also sees to it that all papers are in order. After purchase, the car is refurbished and undergoes an extensive 118 point quality check by a trained engineer, as part of the company's robust certification process. The brand aims to provide its customers quality assurance, safety and a hassle-free driving experience. The company has Warranty products like Warrantyfirst, Certifirst and Certifirst+.  The company has also launched a new product, the Indian Blue Book (IBB) which is the most comprehensive unbiased resource for consumers and dealers to determine the value of their used cars.  A new product for car evaluation called 'Autoinspekt' has been launched. Autoinspekt is an unbiased third party vehicle evaluation report to determine the condition, quality and value of a used vehicle. The report itself covers 53 parameters across 8 vehicle systems of the car and is prepared after physical inspection of the vehicle by a trained engineer. Since its launch in July 2014, the company has now evaluated over 100,000 vehicles using this inspection platform.

Accolades for dealers & franchisees

Every year, MFCWL conducts Dealer Performance Excellence Programme (DPEP) which seeks to recognise and reward its dealers based on overall operating performance across various areas of the business. DPEP is an integral part of the MFCWL process and has been conducted every year since 2010. The programme focuses on five major parameters to measure dealer performance, encompassing critical aspects of the buying or selling experience which further involves: Business Performance, People and Processes, Infrastructure Facilities, Financial Performance and Corporate Sustainability (CSR). The idea behind DPEP is to motivate dealers and franchisees so as to bring in best in terms of sales, customer service and delivery.

This year, MFCWL celebrated its FY-14 performance with 31 dealers who qualified for the awards. These awards are testimony to the high level of performance delivered by MFCWL dealers across India. The 31 dealers received awards in several zones for best performance across the business experience and National X-Mart Performance. Besides this, MFCWL also awarded various zones.

Training & business support

l Training at MFCWL begins with MFC team that further supports the franchisees in selecting and designing the site to deliver best customer experience. They offer complete expertise and support for building a business on professional lines. MFCW operations team continuously works with the franchisee to improve profitability of the business.

l The company has well defined processes for all aspects of the used car industry be it procurement, refurbishment or sales.

l Marketing support is essential to achieve success in any kind of business therefore, they build brand at various levels and generate walk-ins and leads for the outlet.

l To its franchisees, the company also provides necessary tie-ups for infrastructure, working capital, manpower and above all ethical business practices by following necessary processes and involvement in the business.

A swift expansion

Mahindra Group's Chairman and Managing Director Anand Mahindra, says: “By creating an eco-system in the used car market that mirrors the one in the new car market, Mahindra First Choice Wheels has emerged as the brand of choice for used car buyers who appreciate the trust, transparency and peace of mind it offers, a matter of great pride for all of us at Mahindra.”  The brand expects to continue the current level of expansion over the next five years and reach a level of close to 1,500 physical outlets under the MFC brand. The brand expects a million plus prospective customers walking in at their outlets to buy a car of their choice. The company will also launch products as per the needs of the used car buyer and seller.

MFCWL is planning to add another 100 outlets in current financial year; this growth will come from all A/B/C/D category towns where new car dealers exist. The vision of the company is to build a dominant used car ecosystem for India by bridging wholesale and retail channels while leveraging physical and online infrastructure.

Automobile Tycoon: Mahindra First Choice Wheels Ltd (MFCWL), is a part of Mahindra Group which is USD 16.5 billion multinational conglomerates based in Mumbai (India). Mahindra Group, which is spearheaded by a visionary Anand Mahindra entered into aftermarket industry in 1999 to create a business ecosystem for pre-owned cars Today, nearly 15 years after founding Mahindra First Choice Wheels, it isthe leading multi-brand certified used car playerin the country.

Facts about MFCWL

Category: Automotive retail

Annual turnover: 60,000 cars sold during FY 13-14

Operational since: 1999

Franchising since: 2008

Cities present in: 220

Franchise units: 400

Investment: Varies for A/B/C/D cities

Area: Varies for A/B/C/D cities

Location: All A/B/C/D cities

Franchise fee: Refundable deposit varies for A/B/C/D cities

Royalty fee: Varies for A/B/C/D cities

RoI: 30-40%

Break-even: 9 to 12 months












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